West Des Moines, IOWA – The Municipal Fire and Police Retirement System of Iowa (MFPRSI) has announced a slight reduction in the rate Iowa municipalities will contribute to the system during the 2017-18 fiscal year. The new rate approved today by the MFPRSI Board of Trustees will be 25.68%, down from the 25.92% in the current fiscal year, which runs until June 30, 2016.
“Despite significant uncertainties in global markets and continued sluggishness in domestic economic performance, we are pleased the contribution rate will remain relatively stable going into the new fiscal year,” said Terry Slattery, executive director of MFPRSI. “Our commitment is to provide a secure retirement for Iowa’s police officers and firefighters, while helping to ensure an affordable system for the municipalities and taxpayers we serve. Thanks to the long-term funding strategy adopted by our Board of Trustees, we accomplished that goal again this year.”
Pursuant to Chapter 411 of the Iowa Code. the MFPRSI Board of Trustees adopts a new employer contribution rate each year. By law, the contribution rate paid by employees remains constant at 9.4%. However, the employer rate can change from year-to-year based on an annual actuarial review and the board’s long-term plans for ensuring the future obligations to retirees are met.
Despite slow investment growth, the actual employer contribution rates for Iowa communities that participate in 411 plans will vary slightly from the 2016-2017 rate. Holding the line on employer contribution rates is made possible by the MFPRSI Board of Trustees following a deliberate, prudent and fiscally responsible approach to asset management. In fact, since the 411 plan was started more than 20 years ago, the system has maintained an average rate of return of 7.57 percent – higher than the 7.5 percent target rate of return used in the system’s actuarial assumptions.
“The up-and-down volatility of today’s markets definitely pose a challenge, but we are continuing to work hard to make sure municipalities can continue to reap the benefits of falling contribution rates for their retirement plans,” said Marty Pottebaum, chairman of the MFPRSI Board of Trustees. “The entire board is very mindful of the impact it has on many Iowa municipalities, so we take great pride in doing whatever we can to ensure our plans and funding strategies are not only fiscally responsible, but also beneficial to the long-term retirement plans our valued police officers and fire fighters depend on.”
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About MFPRSI
The Municipal Fire and Police Retirement System of Iowa (MFPRSI) was established in 1990 by the Iowa General Assembly to consolidate 87 separate police and fire retirement systems into a statewide system. MFPRSI is dedicated to promoting economic efficiency in the municipal public safety service in Iowa. The organization, which began formal operations on January 1, 1992, administers a retirement plan that makes pension payments to its members who have retired from public service as a police officer or firefighter in 49 employing cities in the state of Iowa. MFPRSI also administers a comprehensive disability program for its membership
